Posts Tagged ‘Charity’

Our latest Freakonomics Radio on Marketplace podcast is called “Free-conomics.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

The gist: economists are a notoriously self-interested bunch, but a British outfit called Pro Bono Economics is giving away its services to selected charities. Martin Brookes is one of its founders:

BROOKES: When we first set up Pro Bono Economics, there were some economists who thought it was wrong, in principle, to give a service to charity for free. That if the service of analysis of their data was valuable, they should have to pay for it.

New research indicates that people may be more likely to lie when a charity benefits from their dishonesty. A group of researchers led by Alan Lewis at University of Bath investigated this in their paper "Drawing the line somewhere: An experimental study of moral compromise" (ungated here). From the paper's abstract:

In a study by Shalvi, Dana, Handgraaf, and De Dreu (2011) it was convincingly demonstrated that psychologically, the distinction between right and wrong is not discrete, rather it is a continuous distribution of relative ‘rightness’ and ‘wrongness’. Using the ‘die-under-the-cup’ paradigm participants over-reported high numbers on the roll of a die when there were financial incentives to do so and no chance of detection for lying. Participants generally did not maximise income, instead making moral compromises.

The intuition of the reader is slightly off. Although not directly a 50-50 charity drive, we have explored the efficacy of lotteries both theoretically and empirically. As John Morgan (from Berkeley) has elegantly shown, under standard assumptions (no risk-loving or lottery-loving behavior is necessary), lotteries outperform the simple ask (what we call a VCM). Lotteries obtain higher levels of public-goods provision than a voluntary contributions mechanism (VCM) because the lottery rules introduce additional private benefits from contributing.

Close your eyes. Imagine what it would feel like to run a marathon. Now imagine that you’ve run not just one marathon, but two marathons in a single day. Seems crazy. Now imagine you’ve run two marathons in a day, every day, for 10 months straight without a day off!

Our latest Freakonomics Radio on Marketplace podcast, "What Makes Donors Donate?" looks at what works (and what doesn’t) to incentivize people to give. A new NBER working paper studies the relationship between religious and ethnic diversity and charitable donations by looking at Canadian census data and tax records. Authors James Andereoni, Abigail Payne, Justin D. Smith and David Karp argue that the two are inversely related, that is to say that the more diverse a neighborhood, the lower its charitable donations. From the abstract:

A 10 percentage point increase in ethnic diversity reduces donations by 14%, and a 10 percentage point increase in religious diversity reduces donations by 10%. The ethnic diversity effect is driven by a within-group disposition among non-minorities, and is most evident in high income, but low education areas. The religious diversity effect is driven by a within-group disposition among Catholics, and is concentrated in high income and high education areas.

Gosh that sounds so stingy. When we are charitable, we don’t want to be cheap. This is our moment of giving, of generosity, not bah-humbugness. Alas, that is exactly what we should be. If we go to a restaurant for chicken wings, what would you think of the following prices:

4 chicken wings: $86 chicken wings: $88 chicken wings: $8

Which would you opt for (assuming more is always better)? Naturally, it shouldn’t require much thought. So why not apply this to charity?

This is what Givewell does. (And I’m pleased to say, you can see the imprint of lots of research from Innovations for Poverty Action on their assessments and recommendations). You may remember I blogged about Givewell over the summer, and how there is no correlation between their assessment of organizational effectiveness and the horrid measure often used by those in search of a good charity, “general administrative and fundraising expenditures as a proportion of program expenses.”

A year ago, my wife said to me, “I need you to do me a favor.” I knew that was bad news. A charity she is heavily involved with, Half the Sky, was planning an event in Chicago and she had volunteered me to be the speaker.

In principle, this was no big deal. I speak in front of groups all the time. I can talk about Freakonomics, SuperFreakonomics, and my academic research in my sleep.

I knew immediately, however, that this speech would be completely different. Although I often tell stories about myself and my life, they are never stories about emotions. I am one of the most closed off people you’ll ever find when it comes to emotional topics. I have never learned, or really even tried to learn how to express emotions. I’m not proud of this, it just is the truth.

There was no way, however, that I could speak at a Half the Sky event without opening up my emotions. Half the Sky is an amazing charity – perhaps one of the world’s best – doing incredible work with Chinese orphanages. The only events that ever fully penetrated my emotional wall were the death of my son Andrew and the subsequent, deeply moving process of adopting a daughter (eventually two daughters) from China. More than a decade later, the emotions associated with these two events remain shockingly raw, hiding just below the surface.

A new iPhone app links your alarm clock snooze button to your wallet. Every time you hit snooze, you pay. To be precise, 25 cents goes to charity. Whilst I admire the charitable impulse and the entrepreneurialism here, I do wonder how effective this commitment device will be. A quarter isn’t a lot. Particularly when in a deep slumber. And the money goes to a good thing. Two slight twists on this app would intrigue me:

1) The anti-charity. A popular option at stickK.com (disclosure: Ian Ayres, fellow Freakonomics contributor, and I are co-Founders of stickK.com), is to pick an "anti-charity" such as the Bush or Clinton Presidential Libraries, depending on your particular persuasion (those in the UK can choose their most despised football team).

2) The reverse: Donate if you do NOT press snooze. Set a goal for money to raise for a charity you love. Every day you do NOT press snooze, you add money to your “to donate” pot. (Yet another disclosure: this would thus work similarly to the American Cancer Society’s http://www.chooseyou.com campaign, which is powered by stickK.com).